If the four-firm concentration ratio of an industry is
A) near 100, the industry is considered very competitive.
B) less than 40, the industry is considered an oligopoly.
C) over 40, the industry is considered monopolistic competition.
D) less than 40, the industry is considered monopolistic competition.
E) close to 0, the industry is considered a monopoly.

Question

Quizplus · Accepted Answer

The four-firm concentration ratio measures the total market share of the four largest firms in an industry. A ratio less than 40 indicates a high level of competition among a larger number of firms, characteristic of monopolistic competition, where many firms compete with differentiated products.

If the Four-Firm Concentration Ratio of an Industry Is